Domestic airline service - quality again

Back before Ansett NZ arrived in the 1980s, when Richard Prebble lifted the limit on foreign investment in domestic airlines to 50%, Air NZ offered just a simple tea/coffee/orange juice service with legendary unopenable packs of cheese and crackers. The arrival of Ansett saw hot meals arrive and first class on domestic flights (with a choice of hot meals), airbridges and business lounges. Air NZ quickly followed suit creating Koru Club, introducing cold meals (then hot meals) and business class, as well as spending several million upgrading the then clapped out mostly central government owned Wellington domestic terminal (oh yes the wonders of government ownership).

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We had around 15 years of competition on service, as Ansett NZ went from strength to strength, was hurt badly by a long running industrial dispute, and eventually was flogged off to become Qantas NZ, which folded and was replaced by Qantas proper operating domestically in NZ. Meanwhile, Air NZ was privatised and came to dominate domestic routes, before investing in Ansett Australia - due to Australian government rules on foreign investment - and nearly collapsing as Dr Cullen refused to let Singapore Airlines bail it out.

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Then Air NZ introduced Express Class, gutting Business Class on domestic flights and all food and drink, except tea/coffee and a cookie - which itself was about to be cut last year.

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Now it's halfway back, with snacks, free bar, and other enhancements. More is to come, with Qantas reintroducing flights to Christchurch, upgrading its domestic lounges, and Air NZ to create a new premium section at the front of its 737s with 3-4 inches more legroom than at present, for full fare and top tier frequent flyers.

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Just another cycle - but it is only a coincidence that service was poor under Muldoon's socialism, got better under Douglas's free market reforms - stayed that way until two years after Labour got into power -then went cheap and is now emerging again to be higher quality just as Labour is about to lose.

Fuck off Jetstar. For starters you're NOT domestic in New Zealand, secondly go promote your proletarian scum class airline in some other way. How cheap can an airline be, especially one owned by the Australian Federal Government's and Michael Cullen's good mate Qantas. Get a proper advertising budget.

Well, if this is a case of history repeating itself, then I would expect that airfares would climb in response. Do you really think that NZ domestic airfares should go back up to the $300/$400 mark that they were prior to the introduction of Express Class? Let us not forget that it would be practically impossible for another operator to start in New Zealand since all of them have failed.

They wont, the competition will ensure that as there will be ample off peak low margin capacity.

With three trunk operators it is clear where they are aiming. Pacific Blue is for low yield leisure traffic, Qantas for high yield interline traffic for international routes and Air NZ is aiming for most of the high yield business market, but has enough capacity after that to cheaply marginally price seats "in the back".

Don't forget many of the savings Air NZ realised were gained by moving to online booking and checkin, and doing away with business class which was expensive to maintain but brought very little revenue besides politicians.

I believe it is the market correcting itself for a failure - the failure being that full fare paying regular business travellers had a el cheapo cram them in product that made them easy pickings for competition (Ansett NZ managed some of that until industrial action decimated the airline)

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About Me

Life, liberty and the pursuit of happiness. Politics, philosophy and economics from a pro-capitalist, libertarian, objectivist perspective. Born in New Zealand, live in the UK, career has been in transport, telecommunications and infrastructure policy.